Should You Increase List Price After You Go Under Contract?- EP 136

2022-05-02

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On this episode of the Real Estate Fight Club Podcast, Jenn and Monica are going to talk about whether you should increase the list price to reflect the offer after you go under the contract. When you use the statistics, for a new listing for information as an agent, hopefully you do look at the property history of other comps that you are using, but some agents might not think of that, and they might not do that. So, then you are kind of skewing the information that has to do with how much you were asking over? Tune in now. Episode Highlights:

On this episode of the Real Estate Fight Club Podcast, Jenn and Monica are going to talk about whether you should increase the list price to reflect the offer after you go under the contract. When you use the statistics, for a new listing for information as an agent, hopefully you do look at the property history of other comps that you are using, but some agents might not think of that, and they might not do that. So, then you are kind of skewing the information that has to do with how much you were asking over? Tune in now.

Episode Highlights:

Jenn says that in the beginning we didn't really know the appraisal process. But the part of the process is answering the question - what is the list price?
As per Monica it can be expressed in a different way other than going back and falsifying the list price because that wasn't the list price.
Monica thinks it is her job as the listing agent to say - hey we had multiple offers around this price, and one was higher, and we just didn't accept it because of something. But the agent needs to know what the demand on the product is, which is helpful.
Jenn wants to talk about what is the package that you give an appraiser? Jenn’s process came from when she started her career. She was a wholesaler and they processed short sales and part of the thing about processing short sales is most of these people had to fill out a form and it was checking boxes. Their goal was to give them what they needed.
If six buyers wanted to pay the price but it's totally not justified from the comparable and maybe even not completely justified with the trends, then it kind of doesn't matter.
Before Jenn was a licensed agent, she was an ambassador. They did the short sales and at the bank they would send out a BPO agent, which was usually a licensed real estate agent. They paid him 50 bucks or 100 bucks to go and evaluate the property.
If you approach in the right way, they appreciate you by saying - hey, I know you have got your process. I just thought this might help. I thought you might be interested in this information. And not Hey, here is how to do your job. I have to be really careful.
Jenn explains how they use showing time and a lot of times they are setting it up for agents to view it with their clients, they can use the app. But for the appraisal, they turn it off, so they have to call Jenn.
An inspection agent goes to the client but not for the purpose of sitting around the house. The agent goes an hour before and maybe an hour in and knocks the neighborhood and says, hey, - I brought the buyer to this house. I just wanted to let you know, there will be a strange car in the driveway. I just wanted to let you know what was going on. There is an inspection today. “
The appraiser is going to see the property history and they are going to go in there and see that you have changed the price of the property on the same day they were on the contract, says Madeline.
The market changes and as the market goes up and if one thing on their form is what is the list price, and it matches the offer then wouldn't that be a good thing?
From Madeline’s point of view one thing is who is going to tell that appraiser if it is ethical or correct or anything?

3 Key Points:

Monica and Jenn share their views on - what is their role as a listing agent to provide information to the appraiser that helps the cause without wanting to influence the cause?
Some appraisers, while they appraise, value is obviously different from the market value, it does help them evaluate the house if they know that six buyers also wanted to pay this price, they can justify that, says Monica.
Tiebreaker, Madeline Jones explains why you should not increase the list price to reflect the offer after you go under the contract.

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